COMMODITY MARKETS IN 2025: METALS

Special Reports - 13/02/2025

13 February, 2025

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

COMMODITY MARKETS IN 2025: METALS

Date: February 13, 2025

TREND EXPECTATIONS: UP

CENTRAL BANKS’ MONETARY POLICY SHIFT: Lower Interest Rates Expected Across the Board in 2025

METALS (GOLD, SILVER, PALLADIUM, PLATINUM, COPPER): The commodity prices depend heavily on Central Banks’ interest rates. When interest rates fall in the US, the commodity prices denominated in US Dollars (Gold, Silver, Palladium, Platinum, Copper) become lower as lower interest rates push the value of the US dollar down. Lower prices, naturally, increase demand for the commodity, causing higher prices thereafter. Therefore, with lower interest rates in 2025, especially in the US, one could expect higher commodity prices in 2025. US FEDERAL RESERVE: The US Federal Reserve has already begun its latest interest rate cut cycle (September 18, 2024), bringing down its benchmark interest rates from the previous 5.5% to the current 4.50%. The Fed expects to cut rates at least two more times in 2025, which could bring the benchmark rates to at least 4% by the end of 2025.

GEOPOLITICAL RISKS: Middle East Tensions, Ukraine-Russia Conflict, China-Taiwan Tensions, North Korea Nuclear Weapon Development

METALS (GOLD, SILVER): US President Donald Trump has recently ordered “Maximum Pressure” to be put on Iran in order to make sure that Iran is not going to be able to develop nuclear weapon any longer. In addition to that, the ongoing conflict between Ukraine and Russia continued to keep investors nervous across the markets as both Ukraine and Russia are grand producers of commodities such as Palladium, Copper, Platinum, Gold etc. North Korea will continue to be a threat with its nuclear weapon development. China once again said they will not allow Taiwan to separate from mainland China, which increases the chances for an intervention. Geopolitical tensions increase demand for safe-haven instruments such as Gold and Silver, but also other commodities as a warring environment causes scarcity fears.

GEOPOLITICAL RISKS: Trade War 2.0

METALS (GOLD, SILVER): US President Donald Trump has started a new episode of the trade war (after the one in 2018) with China by imposing 10% tariffs on Chinese products, while China retaliated by imposing 10% - 15% tariffs on some US products. Meanwhile, US President Donald Trump imposed 25% on aluminum and steel to all countries. US President Donald Trump has also pledged reciprocal tariffs to all countries that have tariffs in place against US products. Trade war tensions tend to increase uncertainties ahead, which pushes investors toward safe-haven instruments such as Gold and Silver.

CHINA’S ONGOING ECONOMIC RECOVERY: More Stimulus To Come In 2025

METALS (PALLADIUM, PLATINUM, COPPER): China is the largest Palladium, Platinum and Copper consumer in the world. The Chinese economy is expected to grow by around 5% in 2025 after a similar GDP (Gross Domestic Product) growth rate in 2024. China is expected to invest in more infrastructure projects in 2025, as Chinese authorities have already announced multi-billion dollars of stimulus packages, with more to come in 2025, meaning that more commodities are expected to rise in demand as China comes back economically.

SELECTED COMMODITY MARKET 2025

GOLD Current Price: $2,903